Iconic GM Executive to Retire

Departure of Bob Lutz Is Just One Major Change Detroit Faces

Bob Lutz, General Motor's plain-spoken product chief and vice chairman, announced his retirement yesterday, signaling changes not only for GM, but also the domestic auto industry.

Lutz was one of the best-known executives in Detroit. He pushed many of the industry's innovative designs, from the Dodge Viper to the Ford Explorer, in a 46-year career that included stops at all three of the American auto giants.

He was never shy with his opinions. He championed horsepower, derided hybrid cars and only last year called global warming "a total crock." Yet he overhauled GM's vehicle line-up, improving fuel economy and quality. In recent years, he's been the chief salesman for the Chevrolet Volt, a plug-in electric car.

"When I do retire at the end of this year, the Volt program will be well on its way to launch and I'll feel the same sense of pride and accomplishment that the entire Volt team will feel when the first ones are silently rolling off the assembly line," Lutz, 76, wrote in a GM blog post titled, "You're Not Rid Of Me Yet."

Lutz was a self-proclaimed "car guy" in a sea of finance-trained executives. He is leaving at a time when it seems likely that lawmakers and regulators soon will have a large say in the kind of cars that will be built in Detroit.

And that's just the beginning of the changes unfolding for the industry.

GM and Chrysler are rushing to meet stakeholders and put the final touches on viability plans scheduled to be submitted to Congress on Feb. 17. Under the terms of their $13.4 billion in federal loans, the two Detroit automakers must cut costs and win concessions from bondholders, labor unions and dealers by that date. They need to prove they can pay back the loans as well as build vehicles that can meet the nation's escalating federal fuel-efficiency standards.

In January, U.S. auto sales dipped to their lowest level in more than two decades. Now executives are crunching numbers, trying to lower their break-even point.

"Chrysler took out $3 billion of fixed costs last year, and will achieve more this year as we take every step necessary to be viable," said Chrysler spokesman Stuart Schorr.

GM is planning salary cuts and layoffs for its white-collar workforce, according to people who spoke anonymously because the details are not public. In December, GM told Congress that by 2012 the company aims to reduce its overall workforce of 96,537 by at least 22 percent.

"We see the plan we delivered on December 2nd as the overall blueprint for our restructuring," GM spokesman Greg Martin said. "What we have been doing the last several weeks is using that blueprint and tying it to the loan terms."

Last week, both companies offered another round of incentives to try to encourage the blue-collar factory workers to quit voluntarily.